diff --git a/packages/@coorpacademy-components/scripts/observables/cleanup.js b/packages/@coorpacademy-components/scripts/observables/cleanup.js
new file mode 100644
index 0000000000..284a34342e
--- /dev/null
+++ b/packages/@coorpacademy-components/scripts/observables/cleanup.js
@@ -0,0 +1,67 @@
+const {readdir, rmdir, stat} = require('fs');
+const {dirname} = require('path');
+const {rm} = require('fs/promises');
+const {Observable} = require('rxjs');
+const {filter} = require('rxjs/operators');
+const {walkDirectory$} = require('./walk-directory'); // your existing directory walker
+
+const readAllStoryFiles$ = cwd =>
+  walkDirectory$(cwd).pipe(filter(filePath => filePath.endsWith('.stories.tsx')));
+
+const removeEmptyFolders$ = (folderPath, removeParents = false) => {
+  return new Observable(observer => {
+    stat(folderPath, (statErr, stats) => {
+      if (statErr || !stats.isDirectory()) {
+        observer.complete();
+        return;
+      }
+      readdir(folderPath, (readErr, files) => {
+        if (readErr) {
+          observer.error(readErr);
+          return;
+        }
+        // Filter out system files if needed
+        const files_ = files.filter(file => file !== '.DS_Store');
+
+        if (files_.length === 0) {
+          rmdir(folderPath, rmdirErr => {
+            if (rmdirErr) {
+              observer.error(rmdirErr);
+              return;
+            }
+            observer.next(folderPath);
+            if (removeParents && dirname(folderPath) !== folderPath) {
+              removeEmptyFolders$(dirname(folderPath), true).subscribe(
+                val => observer.next(val),
+                err => observer.error(err),
+                () => observer.complete()
+              );
+            } else {
+              observer.complete();
+            }
+          });
+        } else {
+          // Not empty
+          observer.complete();
+        }
+      });
+    });
+  });
+};
+
+/**
+ * Recursively deletes a folder (rm -rf).
+ */
+const deleteFolder$ = folderPath => {
+  return new Observable(observer => {
+    rm(folderPath, {recursive: true, force: true})
+      .then(() => {
+        observer.next(folderPath);
+        observer.complete();
+        return null;
+      })
+      .catch(err => observer.error(err));
+  });
+};
+
+module.exports = {readAllStoryFiles$, deleteFolder$, removeEmptyFolders$};
diff --git a/packages/@coorpacademy-components/scripts/observables/generate-stories.js b/packages/@coorpacademy-components/scripts/observables/generate-stories.js
index b7a027182b..f0cd6e5dfb 100644
--- a/packages/@coorpacademy-components/scripts/observables/generate-stories.js
+++ b/packages/@coorpacademy-components/scripts/observables/generate-stories.js
@@ -1,43 +1,85 @@
-const {join, relative} = require('path');
-const {map} = require('rxjs/operators');
-const {concat, of} = require('rxjs');
+const {join, dirname, relative} = require('path');
+const {of, from, concat} = require('rxjs');
+const {map, toArray, mergeMap, shareReplay} = require('rxjs/operators');
 const {readComponentFixtures$} = require('./component-fixtures');
 const {pascalCase} = require('./string');
 const {readComponents$} = require('./components');
+const {readAllStoryFiles$, deleteFolder$, removeEmptyFolders$} = require('./cleanup');
 
-const generateStories$ = cwd =>
-  readComponents$(cwd).pipe(
+/**
+ * Generate story files for all current components.
+ */
+const generateStories$ = cwd => {
+  // 1) Build [storiesPath, lines$] pairs for each component
+  const generation$ = readComponents$(cwd).pipe(
     map(({title, path, type, titleRaw, levels}) => {
       const testPath = join(path, 'test');
       const storiesPath = join(testPath, 'index.stories.tsx');
-      return [
-        storiesPath,
-        concat(
-          of(`import React from 'react';`, `import ${title} from '..';`),
-          readComponentFixtures$({title, path, type}).pipe(
-            map(
-              ({fixture, fixturePath}) =>
-                `import fixture${fixture} from './${relative(testPath, fixturePath)}';`
-            )
-          ),
-          of(
-            `
-export default {
-  title: '${[...levels.map(pascalCase), titleRaw].join('/')}',
-  component: ${title}
-};`
-          ),
-          readComponentFixtures$({title, path, type}).pipe(
-            map(
-              ({fixture}) =>
-                `
+
+      // 1) Read the fixtures once, share the results
+      const fixtures$ = readComponentFixtures$({title, path, type}).pipe(
+        shareReplay({bufferSize: Infinity, refCount: true})
+        // caches and replays the emitted fixtures
+      );
+
+      const fixtureImports$ = fixtures$.pipe(
+        map(
+          ({fixture, fixturePath}) =>
+            `import fixture${fixture} from './${relative(testPath, fixturePath)}';`
+        )
+      );
+
+      const fixtureExports$ = fixtures$.pipe(
+        map(
+          ({fixture}) => `
 export const ${pascalCase(fixture)} = (args: any) => <${title} {...args} />;
 ${pascalCase(fixture)}.args = fixture${fixture}.props;`
-            )
-          )
         )
-      ];
+      );
+
+      const content$ = concat(
+        // 1) Basic imports
+        of(`import React from 'react';`, `import ${title} from '..';`),
+        // 2) Fixture imports
+        fixtureImports$,
+        // 3) Default export
+        of(`
+export default {
+  title: '${[...levels.map(pascalCase), titleRaw].join('/')}',
+  component: ${title}
+};`),
+        // 4) Fixture exports
+        fixtureExports$
+      );
+
+      return [storiesPath, content$];
+    }),
+    toArray()
+  );
+
+  // 2) Remove stale story folders, then emit the new generation array
+  return generation$.pipe(
+    mergeMap(storyEntries => {
+      const desiredStoryPaths = new Set(storyEntries.map(([p]) => p));
+
+      return readAllStoryFiles$(cwd).pipe(
+        mergeMap(existingStoryPath => {
+          if (!desiredStoryPaths.has(existingStoryPath)) {
+            // This story is stale
+            const testFolder = dirname(existingStoryPath);
+            const parentFolder = dirname(testFolder);
+            return deleteFolder$(testFolder).pipe(
+              mergeMap(() => removeEmptyFolders$(parentFolder, true))
+            );
+          }
+          return of(null);
+        }),
+        toArray(),
+        // 3) Finally, emit the storyEntries array for the rest of the pipeline (writing files, etc.)
+        mergeMap(() => from(storyEntries))
+      );
     })
   );
+};
 
-module.exports.generateStories$ = generateStories$;
+module.exports = {generateStories$};